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DEUTSCHE BAHN AG
primarily with SAP standard software, while observing valid
uniform Group procedures. This information is then transmitted
to the centrally managed HFm system.
The respective management of the companies included in
the scope of consolidation and of our individual business units
confirm the correctness of data, among other criteria, that is
relevant for the annual financial statements in a quarterly internal
reporting process. The confirmation report states, in particular,
that the financial data submitted by the reporting unit provides
a fair and true presentation of their major areas of business as
well as the unit’s asset, financial and income situation. In addition,
it also confirms that the responsible management has
established the centrally defined internal control system for
reporting and, if necessary, has supplemented this with their
own internal control system.
No changes were made to DB Group’s internal control system
between the time when the balance sheet was prepared and
when the management report was prepared.
KeY riSK CategorieS anD inDiviDUaL riSKS
In particular, key risks to DB Group’s income statement are:
General economic risks
Demand for our mobility services, and especially our transport
and logistics services, is also dependent on overall economic
development. Economic growth drives the megatrends in our
relevant markets, which in turn are key drivers of our corporate
strategy. For this reason, general economic shocks like the
economic and financial crises can have a negative impact on our
business.
A key influencer of passenger transport is the development
of major economic factors, such as personal disposable income
and the level of employment.
The most critical factor in the rail freight transport business
is freight demand for consumer goods, coal, iron and steel, oil,
chemical products and construction materials. These, on the
one hand, are subject to cyclical fluctuations. On the other
hand, we must consider structural changes in the production
structures of our customers, who are frequently involved in
global competition.
In the area of freight forwarding and logistics, demand for
storage and transport services depends on our customers’
economic development.
Market risks
We face tough intermodal and intramodal competition in the
German passenger transport market, especially from motorized
individual transport, which is the dominant competitor. We are
continuously improving our service performance in order to
strengthen our competitive position. On the offer side we are
optimizing the structure of our scheduled services as part of our
regular schedule updates. We are able to offer more attractive
connections on many routes after completing measures to
improve the infrastructure. We use numerous special offers and
promotions as part of our efforts to improve our customers’
perception of our prices. In addition, we regularly employ sales
promotion measures to specifically target new customers. The
further development of punctuality, which is subject to strict
monitoring, remains important.
Intensive intramodal competition exists across Europe for
long-term service contracts in the regional transport sector. In
order to assert ourselves in this market environment we are
continuously optimizing our tender management and cost structures
so we can submit attractive bids that make economic sense.
Considerable intermodal competitive pressure exists in the
rail freight transport sector in addition to the increasing intensity
of intramodal competition. This situation is being exacerbated
by the increasing market significance of low-cost truck fleets
from the new EU member states. In an isolated analysis of rail
freight transport we can see market risks arising from the
necessity to adjust to the increasing intensity of intermodal
competition and the resulting margin losses. We react to this
with measures to further improve our efficiency and reduce
costs. Furthermore, we are optimizing our range of rail-related
services and integrating rail freight transport into a comprehensive
range of logistics services.
Our activities in the freight forwarding and logistics segments
are especially influenced by competitive markets, highly
dynamic consolidation processes within the logistics sector and
further increases in customer demands. We respond to these
challenges by further expanding our network in order to not
only defend our market positions, but also to strengthen them
from a position of competitive strength.
Across the entire DB Group we combat risks arising from
changing customer demand or shifts in traffic flows with intensive
market observation and by continuously upgrading our
portfolio. In regard to market risks related to changing legal
conditions at domestic or international levels, we actively submit
our position into preliminary consultations and discussions.